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3 Important Tips on How to Measure Social Media ROI

Social Media ROI in simple language means – sum of all the social media actions that create value. We know social media can help grow the business and attain success, but after investing all the time, money and resources – what is the return?

This is where marketing professional must arm themselves with performance marketing metrics, so that their work contributes to the extensive goals of the firm.

Tips on How to Measure Social Media ROI

Measuring social media ROI supports two objectives:

First, you can use ROI to measure your results in real time. As you execute your strategy, you need to know whether particular tactics are accomplishing anything or not. When a method you use fails, you can have a chance to either adjust or replace it.

Second, you can use ROI to justify your budget and, when necessary, to ask for more latitude. A positive ROI will add strength to your proposals and giving you better financing and the freedom you need for doing more.

Of course, performing the measurements can challenge even the most seasoned marketing pro, but it doesn’t mean it is impossible to perform. To do this job, you can use the following tips.

What is Social Media ROI?

No universal definition of ROI exists, so you will need to consider the context of your firm to get a specific meaning of the term. For the most part, the term ROI refers to the total amount of value gained from your social media operation.

After determining the return gained from your efforts, you should compare it to the total investment made to generate the return. Again, the amount of ROI needed to justify an investment can vary from one company to another.

How could I calculate Social Media ROI?

Suppose that you wanted to measure social media ROI based on how much new profits your social media activities brought to the firm. A simple calculation for the percentage of ROI might help:

(New profits)/(Social media investment) = ROI.

Using the above formula, a value greater than 100 would mean that your social media campaign was profitable.

A simple online social media social media ROI calculator would look something like this:

Social ROI calculator

Things to keep in mind:

  • You might encounter challenges while tracing the source of profits.
  • Some organizations may calculate ROI in non-monetary terms.

Why Social ROI Matters?

You need to assess every part of your business to ensure the efficiency and profitability of its operation. To do that, you need to have metrics that you can use for comparison. In the case of your social media campaigns, ROI is an important benchmark.

Still, you must remember the importance of assessing social media ROI on multiple levels. After all, a successful social media strategy may expand your audience and increase the number of leads coming into your organization. In such case, gains in profitability may take a long time to materialize.

Furthermore, what happens if problems in the sales department cause such an increase in leads to go to waste? Therefore, you must analyze data from an appropriate perspective. which can ultimately, help you prove the value of your work by establishing an effective system for measuring results.

The following benefits will help you understand the importance of social media ROI:

  • You can determine whether you are efficiently using available resources.
  • You get a chance to resolve problems before they become major obstacles.
  • ROI proves the relevance of social media to the entire business.
  • It frames social media channels as essential to your collective success.

Now that you know why social media ROI matters, you probably want to get started.

But, you may probably wonder:

How do I make social media ROI work for me?

The following tips will provide you with well-deserved answers.

1. Determine Your Social Media Goals

Naturally, well-defined goals are fundamental to ROI. Can you imagine measuring success when you don’t know what you’re trying to accomplish?

Set your goals before engaging

Set your goals before engaging people in social media and decide what you want to accomplish.. Are you trying to spread brand awareness? Do you want to build the authority of your brand? Other goals might include managing your reputation or creating an outstanding customer experience.

No matter what goals you choose, you should make sure that they are realistic and consistent with your business model. After all, trying to do the wrong thing or too much of a good thing can detract from your business rather than support it.

Your goals will help determine the number of resources that you should dedicate to social media. They will also guide your content choices as well as the tone you use for your brand.

As you articulate your goals, try using the SMART approach. Your goals should be:

  • Specific: A narrow scope will help you to stay focused.
  • Measurable: When you know what results you’re getting, you can determine the value of your work.
  • Attainable: Goals that seem impossible to reach can kill your motivation.
  • Relevant: Even specific, measurable and achievable goals can have nothing to do with the mission of your firm.
  • Time-sensitive: Goals set too far in the future invite procrastination. Meanwhile, goals set too close to the present can cause panic.

2. Choose The Right Metrics

If you followed the above advice, you have defined measurable goals. With this in mind, you now have the task of choosing what metrics you will use. Some examples of metrics you might use include the number of new leads, newsletter subscribers or sales.

As you make your choices, make sure you pick the metrics that have relevance to your goals. For instance, you will probably feel challenged trying to use generated profits as a metric if your goal is to expand the reach of your brand.

Think about this:

What good is a metric if it measures something unrelated to your goals?

To avoid getting trapped by a metric, ask some vital questions before adopting it.

  • How does this relate to my goals?
  • Does this support good decision making?

When you find a satisfactory metric, look for others that complement it. To demonstrate this, suppose you were measuring clicks on a particular link. Now, imagine that you were tracking clicks as well as their bounce rate. See? By adding a complementary metric, you can get a better picture of performance.

Bounce rate

Bounce rate indicates the relevance of a link to its destination. If a user quickly leaves your website after clicking a link, you can assume that the content was either uninteresting or irrelevant. So, positive ROI might involve a low bounce rate for traffic coming from your social media profiles.


Social media mentions are another potential benchmark. This metric tracks how often and how many people talk about your brand. Such a measurement becomes additionally helpful when you use it to compare your mentions versus those of your competitors.

Comparing mentions of your brands to many others in your industry creates an extra metric called “social share of voice.” When your brand rises and falls based on the percentage of total mentions, you command at any given time. Third-party applications can equip you to monitor this metric.

Social media mentions


Businesses often want to track leads because they have a closer correlation to profits than other metrics. Collecting leads can involve one or more of several activities that require users to register:

  • Providing premium material.
  • Sponsoring contents.
  • Hosting live events.

Marketing automation software can help you track the gathering of leads. To make it work better, you will usually have to add a code to the URL of your links. Based on the code, you can prove which registered users originated from social media.

3. Report Your Results

After setting goals and choosing metrics, the time comes to create reports. Here, the goal is to create a standardized format that lets you collect and store data over the course of time. In other words, you need to make sure that you can compare historical data.

In addition to properly formatted reports, you will also need to establish a reporting schedule. In general, data comparisons work best when data are collected at equal intervals, and these look great on your proposals as well.

Here’s the deal:

You can usually choose to report based on a year, quarter, month or week. In the case of social media campaigns, you will probably use a relatively short interval. Also, you need to make sure that each data stays identified with its source.

You can use third-party tools to help you with the collation, transformation, and presentation of your data. These tools can streamline the entire reporting process while improving your ability to analyze and interpret your results.

Reporting tools can also automate the generation or reports so that you always have information available at regular intervals. Your software can also help you closely monitor your data by emailing you daily reports. When you configure that option, you give yourself a chance to correct errors before they cause significant problems.

What’s the bottom line?

In the end, you have a two-tiered goal. For starters, you want to show that your social media efforts are generating value for the firm. Second, as time passes, you want to increase the value of your social media campaigns.

When you identify a failing campaign, you need to quickly either correct or abandon it. Similarly, your reports might identify flaws with your goals or metrics. In that case, you can also take corrective action.

Key Takeaways

Social media can deliver fantastic value to your firm. However, as is the case with any business process, you need to justify the investment of time and human resources. That’s when measuring social media ROI becomes important.

Ultimately, your choice of tools for collecting data and preparing reports will play a vital role. In the end, measuring social media ROI can ensure that you make the best possible use of social media in your business.

Author: Heather Redding

Heather Redding is a part time assistant manager and freelance writer based in Aurora, Illinois. She is a coffee-addict who enjoys swimming and reading. Street photography is her newly discovered artistic outlet and she likes to capture life's little moments with her camera.